Exhibit 10.14
INDEMNIFICATION AGREEMENT FOR OFFICERS AND DIRECTORS
Preamble
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This Indemnification Agreement (this "Agreement") is made as of this ____
day of ___, ____, by and between California Micro Devices Corporation, a
California corporation (the "Company"), and
___________________________________________ ("Indemnitee").
Recitals
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A. The Company and Indemnitee recognize the increasing difficulty in
obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance, and the general reductions in the
coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting officers and directors to expensive
litigation risks at the same time as the availability and coverage of liability
insurance has been severely limited and is not currently available to the
Company.
C. Indemnitee does not regard the current protection avail able as adequate
under the present circumstances, and Indemnitee and other officers and directors
of the Company may not be willing to continue to serve as officers and directors
without additional protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and directors of
the Company and to indemnify its officers and directors so as to provide them
with the maximum protection permitted by law.
Agreement
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Based upon the facts and premises contained in the above Recitals and in
consideration of the mutual promises below, the Company and Indemnitee hereby
agree as follows:
1. Bylaw Indemnification and Expense Advancement. The Company agrees to
advance expenses to Indemnitee and indemnify Indemnitee to the fullest extent
provided in the present bylaws of the Company, a copy of the relevant section of
which is attached hereto as Exhibit A, and, to the extent specified in Section 2
below, any subsequent amendments to the Company's Bylaws. For purposes of this
Agreement, subsequent references to indemnification shall include the
advancement of expenses. This Agreement is expressly meant to cover
"proceedings" in which Indemnitee is a party or is threatened to be made a party
by means of the fact that Indemnitee is or was an "agent" of the Company not
only by virtue of services as an "agent" after the date of this Agreement but
also by virtue of services as an agent prior to the date of this Agreement (with
"agent" and "proceeding" as defined in subsection (k) of the said bylaw).
2. Changes. In the event of any change, after the date of this Agreement,
in any applicable law, statute, or rule which expands the right of a California
corporation to indemnify a
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member of its board of directors or an officer, such changes shall be
automatically, without further action of the parties, within the purview of
Indemnitee's rights and Company's obligations, under this Agreement. In the
event of any change in any applicable law, statute or rule which narrows the
right of a California corporation to indemnify a member of its board of
directors or an officer, such changes, to the extent not other wise required by
such law, statute or rule to be applied to this Agreement, shall have no effect
on this Agreement or the parties' right and obligations hereunder. In the event
of an amendment to the Company's bylaws which expands the right of a California
corporation to indemnify a member of its board of directors or an officer, such
change shall be automatically, without further action of the parties, within
Indemnitee's rights and Company's obligations under this Agreement. In the event
of any amendment to the Company's bylaws which narrows such right of a
California corporation to indemnify a member of its board of directors or an
officer, such change shall only apply to the indemnification of the Indemnitee
for acts committed, or lack of action, by Indemnitee after such amendment. The
Company agrees to give Indemnitee prompt notice of amendments to the Company's
bylaws which concern indemnification.
3. Nonexclusivity. The indemnification provided by this Agreement shall not
be deemed exclusive of any rights to which Indemnitee may be entitled under the
Company's Articles of Incorporation, its Bylaws, any agreement, any vote of
share holders or disinterested Directors, the California Corporations Code, or
otherwise, both as to action in Indemnitee's official capacity and as to action
in any other capacity while holding such office (an "Indemnified Capacity"). The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an Indemnified Capacity even
though he may have ceased to serve in an Indemnified Capacity at the time of any
action, suit or other covered proceeding.
4. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgment, fines or penalties actually or reasonably incurred by him in
the investigation, defense, appeal or settlement of any civil or criminal
action, suit or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.
5. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that
in certain instances, Federal law or public policy may override applicable state
law and prohibit the Company from indemnifying its directors and officers under
this Agreement or otherwise. For example, the Company and Indemnitee acknowledge
that the Securities and Exchange Commission (the "SEC") has taken the position
that indemnification is not permissible for liabilities arising under certain
federal securities laws, and federal legislation prohibits indemnification for
certain ERISA violations. Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future to undertake with the
SEC to submit questions of indemnification to a court in certain circumstances
for a determination of the Company's right under public policy to indemnify
Indemnitee. Furthermore, the Indemnitee and Company acknowledge that the extent
of indemnification permissible under Section 204(a)(11) of the California
Corporations Code has not been judicially determined; therefore, the enforce
ability of Indemnitee's rights under Subsection 5.8(l) of Article 5 of the
Company's Bylaws is uncertain.
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6. Severability. Nothing in this Agreement is intended to require or shall
be construed as requiring the Company to do or fail to do any act in violation
of applicable law. The Company's inability, pursuant to court order, to perform
its obligations under this Agreement shall not constitute a breach of the
Agreement. If the application of any provision or provisions of the Agreement to
any particular facts or circumstances shall be held to be invalid or
unenforceable by any court of competent jurisdiction, then (i) the validity and
enforceability of such provision or provisions as applied to any other
particular facts or circumstances and the validity of other provisions of this
Agreement shall not in any way be affected or impaired thereby and (ii) such
provision(s) shall be reformed without further action by the parties to make
such provision(s) valid and enforceable when applied to such facts and
circumstances with a view toward requiring Company to indemnify Indemnitee to
the fullest extent permissible by law.
7. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance expenses
to Indemnitee with respect to proceedings or claims (except counter-claims
or cross claims) initiated or brought voluntarily by Indemnitee and not by
way of defense, except with respect to proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other
statute or law or otherwise as required by the California Corporations
Code, but such indemnification or advancement of expenses may be provided
by the Company in specific cases if the Board of Directors finds it to be
appropriate; or
(b) Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by
Indemnitee in such proceeding was not made in good faith or was frivolous;
or
(c) Insured Claims. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) which have been paid directly to Indemnitee by an insurance
carrier under a policy of officers' and directors' liability insurance
maintained by the Company; or
(d) Claims under Section 16(b). To indemnify Indemnitee for expenses
or the payment of profits arising from the purchase and sale by Indemnitee
of securities in violation of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or any similar successor statute.
8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
9. Successors and Assigns. This Agreement shall be binding upon the Company
and its successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee's estate, heirs, and legal representatives and permitted assigns.
Indemnitee may not assign this Agreement without the prior written consent of
the Company.
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10. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
11. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by certified or registered mail with postage prepaid,
on the third business day after the date postmarked. Addresses for notice to
either party are as shown under Authorized Signatures at the end of this
Agreement, or as subsequently modified by written notice.
12. Paragraph Headings. The paragraph and subparagraph headings in this
Agreement are solely for convenience and shall not be considered in its
interpretation.
13. Waiver. A waiver by either party of any term or condition of the
Agreement or any breach thereof, in any one instance, shall not be deemed or
construed to be a waiver of such term or condition or of any subsequent breach
thereof.
14. Entire Agreement; Amendment. This instrument contains the entire
integrated Agreement between the parties hereto and supersedes all prior
negotiations, representations or agreements, whether written or oral except for
the Company's Articles of Incorporation and Bylaws. It may be amended only by a
written instrument signed by a duly authorized officer of Company or by
Indemnitee.
15. Choice of Law and Forum. Except for that body of law governing choice
of law, this Agreement shall be governed by, and construed in accordance with,
internal laws of the State of California which govern transactions between
California residents. The parties agree that any suit or proceeding in
connection with, arising out of or relating to this Agreement shall be
instituted only in a court (whether federal or state) located in Santa ▇▇▇▇▇
County in the State of California, and the parties, for the purpose of any such
suit or proceeding, irrevocably agree and submit to the personal and subject
matter jurisdiction and venue of any such court in any such suit or proceeding
and agree that service of process may be effected in the same manner notice is
given pursuant to Section 11 above.
16. Consideration. Part of the consideration the Company is receiving from
Indemnitee to enter into this Agreement is Indemnitee's agreement to serve or to
continue to serve, as applicable, for the present as a director and/or officer
of the Company. Nothing in this Agreement shall preclude the Indemnitee from
resigning as an officer and/or director of the
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Company nor the Company, by action of its shareholders, board of directors, or
officers, as the case may be, from terminating the Indemnitee's services as an
officer, director, and/or employee, as the case may be, with or without cause.
Authorized Signatures
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In order to bind the parties to this Indemnification Agreement, their duly
authorized representations have signed their names below on the dates indicated.
California Micro Devices Corporation
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇ ▇ .▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(address)
Date Executed:
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AGREED TO AND ACCEPTED:
INDEMNITEE:
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Signature
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Printed Name
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(address)
Date Executed:
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Exhibit A
Article IX
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Indemnity of Officers, Directors, etc.
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(a) Action, Etc. Other than by Right of the Corporation. The corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any proceeding (other than an action by or in the right of the
corporation to procure a judgment in its favor) by reason of the fact that such
person is or was an Agent of the corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with such proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in the best interests of the
corporation and, in the case of a criminal proceeding, had no reasonable cause
to believe the conduct of such person was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person reasonably
believed to be in the best interests of the corporation or that the person had
reasonable cause to believe that the person's conduct was unlawful.
(b) Action, Etc., By or in the Right of the Corporation. The corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was an Agent of the corporation, against expenses actually and
reasonably incurred by such person in connection with the defense or settlement
of such action if such person acted in good faith, in a manner such person
believed to be in the best interests of the corporation and its shareholders;
except that no indemnification shall be made under this Article IX(b) for any of
the following:
(i) In respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation in the performance
of such person's duty to the corporation and its shareholders, unless and
only to the extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for the expenses which such court shall determine;
(ii) Of amounts paid in settling or otherwise disposing of a pending
action without court approval; or
(iii) Of expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
(c) Determination of Right of Indemnification. Any indemnification under
Article IX(a) and Article IX(b) shall be made by the corporation only if
authorized in the specific case, upon a determination that indemnification of
the Agent is proper in the circumstances because that Agent has met the
applicable standard of conduct set forth above in Article IX(a) and Article
IX(b) by any of the following:
(i) A majority vote of a quorum consisting of directors who are not
parties to such proceeding;
(ii) If such a quorum of directors is not obtainable, by independent
legal counsel in a written opinion;
(iii) Approval of the shareholders by the affirmative vote of a
majority of the shares entitled to vote represented at a duly held meeting
at which a quorum is present or by the written consent of shareholders as
provided in Article III, Section 7, with the shares owned by the person to
be indemnified not being entitled to vote thereon; or
(iv) The court in which such proceeding is or was pending upon
application made by the corporation or its Agent or attorney or other
person rendering services in connection with the defense, whether or not
such application by the Agent, attorney or other person is opposed by the
corporation.
(d) Advances of Expenses. Expenses (including attorneys' fees), costs, and
charges incurred by an Agent in defending any proceeding or action referred to
in Article IX(a) or Article IX(b) shall be advanced by the corporation prior to
the final disposition of such proceeding or action upon receipt of an
undertaking by or on behalf of the Agent to repay such amount if it shall be
determined ultimately that the Agent is not entitled to be indemnified as
authorized in this Article IX.
(e) Indemnification Against Expenses of Successful Party. Notwithstanding
the other provisions of this Article IX, to the extent that an Agent has been
successful on the merits in defense of any proceeding or action referred to in
Article IX(a) or Article IX(b), or in defense of any claim, issue or matter
therein, such Agent shall be indemnified against all expenses actually and
reasonably incurred by the Agent in connection therewith.
(f) Right of Agent to Indemnification Upon Application; Procedure Upon
Application. Any indemnification provided for in Article IX(a), (b), or (e)
shall be made no later than ninety (90) days after the corporation is given
notice of request by Agent, provided that such request is made after final
adjudication, dismissal, or settlement unless an appeal is filed, in which case
the request is made after the appeal is resolved (hereafter referred to as
"Final Disposition"). Upon such notice, if a quorum of directors who were not
parties to the action, suit, or proceeding giving rise to indemnification is
obtainable, the corporation shall within two (2) weeks call a Board of Directors
meeting to be held within four (4) weeks of such notice, to make a determination
as to whether the Agent has met the applicable standard of conduct. Otherwise,
if a quorum consisting of directors who were not parties in the relevant action,
suit, or proceeding is not obtainable, the corporation shall retain (at the
corporation's expense) independent legal counsel chosen either jointly by the
corporation and Agent or else by corporation counsel within two (2) weeks to
make such determination. If (1) at such directors meeting such a quorum is not
obtained or, if obtained, refuses to make such determination or (2) if such
legal counsel is not so retained or, if retained, does not make such
determination within four (4) weeks, then the Board of Directors shall cause a
shareholders meeting to be held within four (4) weeks to make such a
determination.
(g) If notice of a request for payment of a claim under these bylaws, under
any statute, under any provision of any agreement with the corporation, or under
the corporation's articles of incorporation providing for indemnification or
advance of expenses has been given to the corporation by Agent, and such claim
is not paid in full by the corporation within ninety (90) days of the later to
occur of the giving of such notice or Final Disposition in case of
indemnification, and twenty (20) days of the giving of such notice in case of
advance of expenses, Agent may, but need not, at any time thereafter bring an
action against the corporation to receive the unpaid amount of the claim or the
expense advance and, if successful, Agent shall also be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to
enforce a claim for expenses incurred in connection with any action, suit, or
proceeding in advance of its Final Disposition) that Agent has not met the
standards of conduct which make it permissible under applicable law for the
corporation to indemnify Agent for the amount claimed, and Agent shall be
entitled to receive interim payment of expenses pursuant to Article IX(d) unless
and until such defense may be finally adjudicated by court order or judgment
from which no further right of appeal exists. Neither the failure of the
corporation (including its Board of Directors, independent legal counsel, or its
shareholders) to have made a determination that indemnification of Agent is
proper in the circumstances because Agent has met the applicable standard of
conduct required by applicable law, nor an actual determination by the
corporation (including its Board of Directors, independent legal counsel, or its
shareholders) that Agent has not met such applicable standard of conduct, shall
create a presumption that the Agent has or has not met the applicable standard
of conduct.
(h) Other Rights and Remedies. The indemnification provided by this Article
IX shall not be deemed exclusive of, and shall not affect, any other rights to
which an Agent seeking indemnification may be entitled under any law, other
provision of these bylaws, the corporation's articles of incorporation,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his or her official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be an Agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
(i) Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was an Agent against any liability asserted
against such person and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the corporation would have the
power to indemnify such person against such liability under the provisions of
this Article IX.
(j) Optional Means of Assuring Payment. Upon request by an Agent certifying
that the Agent has reasonable grounds to believe the Agent may be made a party
to a proceeding for which the Agent may be entitled to be indemnified under this
Article IX, the corporation may but is not required to create a trust fund,
grant a security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such sums as may become necessary to
effect indemnification as provided herein.
(k) Savings Clause. If this Article IX or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each Agent as to expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit, proceeding, or investigation, whether civil, criminal or
administrative, and whether internal or external, including a grand jury
proceeding and an action or suit brought by or in the right of the corporation,
to the full extent permitted by any applicable portion of this Article IX that
shall not have been invalidated, or by any other applicable law.
(l) Definition of Agent. For the purposes of this Article IX, "Agent" means
any person who is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or was a director,
officer, employee or agent of a foreign or domestic corporation which was a
predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation; "proceeding" means any threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes without limitation
attorneys' fees and any expenses of establishing a right to indemnification.
(m) Indemnification under Section 204(a)(11) of the California Corporations
Code. Subject to the provisions of California Corporations Code Section
204(a)(11) and any other applicable law, notwithstanding any other provisions of
these bylaws, the following shall apply to the indemnification of Agents under
these bylaws:
(i) The corporation shall indemnify a person pursuant to this
Article IX(l) if the corporation would be required to indemnify such person
pursuant to Article IX(a) or Article IX(b) if in Article IX(a) and Article
IX(b) the phrase "in a manner such person reasonably believed to be in the
best interests of the corporation" is replaced with the phrase "in a manner
such person did not believe to be contrary to the best interests of the
corporation". If pursuant to Article IX(c) and Article IX(f) the person
making the Article IX(a) and/or Article IX(b) conduct standard
determination determines that such standard has not been satisfied, such
person shall also determine whether this Article IX(l) conduct standard has
been satisfied;
(ii) There shall be a presumption that the Agent met the applicable
standard of conduct required to be met in either Article IX(a) or Article
IX(b) for indemnification of the Agent, rebuttable by clear and convincing
evidence to the contrary;
(iii) The corporation shall have the burden of proving that the Agent
did not meet the applicable standard of conduct in either Article IX(a) or
Article IX(b);
(iv) In addition to the methods provided for in Article IX(c), a
determination that indemnification is proper in the circumstances because
that Agent met the applicable standard of conduct may also be made by the
arbitrator in any arbitration proceeding in which such matter is or was
pending;
(v) Unless otherwise agreed to in writing between an Agent and the
corporation in any specific case, indemnification may be made under Article
IX(b) for amounts paid and expenses incurred in settling or otherwise
disposing of a pending action without court approval.